Telemarketers scramble to comply with states' no-call lists

By The Associated Press

07.03.02

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It strikes fear in the hearts of families sitting down to dinner, nightshift workers trying to catch some afternoon shuteye and new parents whose fussy baby is finally asleep.

It's the ringing telephone — or, more specifically, the possibility a pesky telemarketer might be on the other end.

"When I run to pick up the phone and it's somebody trying to sell me something, I get so mad," said Maria Jones, a Fort Worth, Texas, homemaker.

Telemarketers have become so despised that more than half a million Texans have registered for a no-call list, similar to those in more than two dozen states. A new Texas law required companies to abide by the state list starting July 1.

Meanwhile, telemarketers were scrambling this week to comply with Colorado's no-call law after a federal judge refused to block the law from going into effect July 1.

Critics say such laws violate freedom of speech.

Telemarketing is a $662 billion industry nationwide — nearly 6% of the gross domestic product — and has 6 million employees, according to the Direct Marketing Association.

"I think folks at the state and federal levels had in their mind that this was kind of a small business that kind of annoyed people, so it's OK to revile it," said Louis Mastria, spokesman for the New York-based DMA. "But those things don't match up with the economic reality."

An estimated 185 million Americans purchase goods or services by phone each year, including many older residents who don't feel comfortable doing business over the Internet, according to industry records.

For every 19 people who yell at or hang up on telemarketers, there's at least one who's receptive to the sales pitch, according to industry statistics.

"I don't think people mind being called at home. Most consumers are bothered by the volume of calls," said Kevin Brosnahan, spokesman for the Washington, D.C.-based American Teleservices Association.

It's too soon to tell whether the no-call laws will prompt companies to cut back on telemarketing, industry officials say.

But the additional costs — registering with the state, buying no-call lists several times a year, hiring people to input the lists and paying hefty fines for violations — likely will be passed on to consumers.

"It will force legitimate telemarketers to pay for the sins of the 20 percent of the industry that give us all a black eye," Mastria said.

In Colorado, Boulder-based e-InfoData Inc., the private contractor maintaining the state's list, has been flooded with calls from companies seeking the phone numbers of more than 750,000 Coloradans who have signed up to block phone solicitors.

"The phones are going crazy," said company spokesman Andrew Dashiell.

About 105 consumer complaints were filed with state Attorney General Ken Salazar's office by the afternoon of July 1, said his spokesman Ken Lane.

The law requires telemarketers to buy a list of people who put their phone numbers on a no-call list. Telemarketers are prohibited from calling any number on the list. Exceptions are made for calls by companies that have done business with the person in the past and for calls by nonprofits, political candidates or organizations and pollsters.

On June 26, a federal judge refused to block the Colorado telemarketing bill.

"They were probably waiting to see what the federal court would do," Lane said. "That's probably why you're seeing this sudden rush (to comply)."

The telemarketers claim the new law is unfair because while it prevents them from making calls, it allows telephone solicitation for political campaigns, charities and previous customers. They also said it impairs free speech.

Telemarketers must pay up to $500 a year to access the list. Three or more violations are subject to a fine of $2,000 per call, and out-of-state companies are not exempt.

The 750,000 numbers on the list represent nearly half of Colorado's 1.6 million households. The General Assembly gave its final approval May 9, 2001.

Meanwhile, Texas state Rep. Roberto Gutierrez, D-McAllen, said he cosponsored that state's no-call bill because federal laws didn't have enough teeth, and his constituents were complaining. Now, he said, Texans can turn in rogue telemarketers to the state's Public Utility Commission, which sponsors the no-call list.

Gutierrez said the $1,000-per-violation fine is appropriate. New York fines telemarketers $5,000 per violation.

"No-call lists don't put anybody out of business," said Rep. Burt Solomons, R-Carrollton, the Texas bill's other co-sponsor.

But the marketing and teleservices associations say the federal Telephone Consumer Protection Act of 1991 and the Telemarketing and Consumer Fraud and Abuse Prevention Act of 1994 are stringent enough.

They say keeping up with different state laws can be difficult.

For example, telemarketers are banned from calling Mississippi residents on Sundays. In Illinois, telemarketers aren't allowed to "rebut" when a resident says he or she isn't interested.

Some states prohibit telemarketers from blocking their numbers. But technology, not intentional blocking, at many large call centers causes numbers not to show up on a resident's caller ID system, Brosnahan said.

Texas and most other states' no-call laws don't apply to charities, politicians and companies that previously have done business with a resident.

"This seems to have become a political football for state-level politicians, who don't do too much," Brosnahan said. "Telemarketing seems to be something they can take home to their constituents. It's kind of ironic ... because they are exempt from the law."

The Direct Marketing Association started a national no-call list in 1985 and now has 4.5 million phone numbers of people who don't want any telemarketing calls. The association requires its 4,700 members to use the list, which is voluntary.

"It's expensive to have representatives calling unresponsive people who won't become customers," Mastria said. "So there's plenty of protection (against telemarketers) already out there."

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